We see a mixed bag for Stockwik in Q1 and expect the Healthcare and Property Services segments (15% and 41% of ‘22e sales) to have been negatively affected by the high rate of infection and sick leave in early ’22, while the Industry segment (29% of ‘22e sales) likely saw continued cost inflation and some component shortages. Despite the headwinds, we are cautiously optimistic and expect sales of SEK 149m in the seasonally small quarter, up 26% y-o-y (3% org, 23% M&A) and -22% q-o-q, in line with the q-o-q drawdown in ’21 and ’20 (not adj. for M&A impact, as Stockwik does not report the split between org. and acquired growth). We est. adj. EBITA of SEK 11m for a 7.4% margin (6.6%), with the 0.8 pp y-o-y rise explained by margin-accretive acquisitions.
M&A headroom supports 16-41% add to ‘22e EBITA…
We raise our ‘22e-‘24e sales estimates by 3-4%, respectively, following the acquisition of Hälsobolaget with annual sales of SEK ~30m. For ‘22e, we lower our adj. EBITA est. by 4% on higher cost assumptions, but raise ’23e-‘24e by 3-4% on M&A. All in all, we forecast a 20% ’21-‘24e adj. EBITA CAGR. With ‘22e ND/EBITDA of 2.8x and assuming expansion to 3.5x, Stockwik has headroom to add ~16% to our ‘22e adj. EBITA estimates. In such a scenario, ‘22e EV/EBITA becomes ~12.9x and pf ND/EBITDA of ~3.0x. In a more aggressive scenario, where Stockwik stretches its ND/EBITDA to 4.5x (vs. L4Y avg. of 5.7x), the firm could add 41% to our ‘22e adj. EBITA estimates, implying ‘22e EV/EBITA of ~11.7x and pf ND/EBITDA of ~3.2x, well below its bond covenants of max. 5.5x pf ND/EBITDA. The latter scenario implies M&A spending of SEK 145m (given M&A multiplies of 6x EV/EBITA), which could be financed through Stockwik’s FY’21 cash position of SEK 187m.
…and M&A scenario implies a 30% ‘22e-‘26e EBITA CAGR T ...
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